Santee Cooper, SCANA abandon Summer nuclear plant construction

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Dive Brief:

Santee Cooper and SCANA Corp. will abandon efforts to build two new nuclear reactors at the Summer plant in South Carolina, the utilities announced on Tuesday.

The board of Santee Cooper, which owns 45% of the project, voted unanimously on Monday to halt construction, citing costs officials said could reach over $25 billion. SCANA Corp., which owns 55%, said in a statement it will immediately file plans with regulators to cease construction as well.

The decisions follow a commitment last week from Toshiba to contribute $2.2 billion toward the plant's completion. Problems with the reactor supplied by Toshiba subsidiary Westinghouse caused long delays and cost overruns at the Summer plant and the Vogtle nuclear project in Georgia, which also faces possible cancellation.

Dive Insight:

SCANA and Santee Cooper's decision to end construction on the Summer nuclear plant ends months of discussion at the two utilities on whether to forge ahead with the over-budget and behind-schedule nuclear project.

Last week, Cooper and SCANA subsidiary SCE&G accepted a $2.2 billion commitment from Toshiba to continue building the plant, but warned that the funds may be insufficient to complete construction.

At Monday's Santee Cooper board meeting, utility officials reportedly estimated it would cost an additional $11.4 billion to finish the project, adding up to a total cost of about $25 billion. That 75% increase in the original cost estimate proved too much for Santee Cooper, which the Post and Courier notes has raised rates five times to cover the cost of the project.

SCE&G has raised rates nine times to cover the Summer plant, The State newspaper notes, and said it will file plans with regulators to abandon its portion of the construction as well. The utilities faced an Aug. 10 deadline to file cost studies on the plant to the South Carolina Public Service Commission.

Originally proposed in 2007, the two-reactor expansion of the Summer plant was supposed to be completed by 2017 and 2018, respectively. But construction crews ran into problems with Westinghouse Electric's AP1000 reactor design, causing delays and cost overruns that led the nuclear developer to file for bankruptcy in March.

After taking over construction from Westinghouse, the utilities now say they would likely be unable to finish construction before the end of 2021, when a critical federal tax credit for nuclear energy is set to expire. In a statement, SCANA CEO Kevin Marsh blamed the contractor woes for scuttling the expansion.

"[T]he bankruptcy of our primary construction contractor, Westinghouse, eliminated the benefits of the fixed-price contract to our customers, investors, and other stakeholders," Marsh said. "Ultimately, our project co-owner Santee Cooper's decision to suspend construction made clear that proceeding on our own would not be economically feasible."

The decision leaves only one nuclear plant under construction in the United States — Southern Co.'s Vogtle nuclear project. That facility has experienced similar problems with reactor design and cost overruns, and Southern officials are expected to decide in August whether to terminate construction.